Friday, March 29, 2024

PC shipments see sharp decline in Q1 2020 despite bigger demand for remote work

The global traditional PC market, comprised of desktops, notebooks, and workstations, declined 9.8% year over year in the first quarter of 2020 (1Q20), reaching a total of 53.2 million shipments according to preliminary results from research firm IDC.

The stark decline after a year of growth in 2019 was the result of reduced supply due to the outbreak of Covid-19 in China, the world’s largest supplier of PCs.

While production capacity in January was pretty much on par with past years, the extended closure of factories in February and the slow resumption of manufacturing along with difficulties in logistics and labor towards the end of the quarter led to a reduction of supply.

Meanwhile, demand rose during the quarter as many employees needed to upgrade their PCs to work from home and consumers sought gaming PCs to keep themselves entertained.

“Though supply of new PCs was somewhat limited during the quarter, a few vendors and retailers were able to keep up with the additional demand as the threat of increased tariffs last year led to some inventory stockpiling at the end of 2019,” said Jitesh Ubrani research manager for IDC’s Mobile Device Trackers.

“However, this bump in demand may be short lived as many fear the worst is yet to come and this could lead to both consumers and businesses tightening spending in the coming months.”

“IDC believes there will be longstanding positive consequences once the dust settles,” said Linn Huang, research vice president for devices and displays at IDC. “Businesses that once primarily kept their users on campus will have to invest in remote infrastructure, at the very least, for continuity purposes. Consumers stuck at home have had to come to terms with how important it is to keep tech up to date. This should provide a steady, long-range tailwind for PC and monitor markets, among other categories.”

Company Highlights

Lenovo once again managed to capture the leading position despite declining 4.3% during the quarter. Excluding the Asia-Pacific region and Japan, the company managed to grow across all the other regions thanks to increased demand stemming from new work from home policies.

HP Inc. finished the quarter in second place while declining 13.8% year over year during the quarter. Despite the company’s scale and brand recognition, it was unable to secure enough supply during the quarter leading to a slight reduction in share.

Dell Technologies once again ranked third overall. This was a rather successful quarter for the company as it was one of the few companies that managed to grow during the quarter — up 1.1% year over year — thanks to strong relationships with the supply chain.

Acer Group rose to fourth place with close to 3.4 million units shipped in the quarter. By pulling in inventory ahead of the shutdown in February, the company was able to negate some of the ill effects of the supply disruption. A strong gaming portfolio as well as success in the Chromebook market helped the company rise up the ranks.

Apple saw its Mac volumes decline by 20.7% year over year, one of the largest drops in recent history as almost all of its manufacturing is based in China and the company was one of the hardest hit by the shutdown of factories.

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